Crowdfunding helps SF brands give customers what they want

Leather-goods brand Linjer used crowdfunding to move into watches that are designed with founder Roman Khan’s Norwegian heritage in mind,

Leather-goods brand Linjer used crowdfunding to move into watches that are designed with founder Roman Khan’s Norwegian heritage in mind,

Photo: Linjer

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The North Coast Collection is a collaboration between Taylor Stitch and Mission Workshop.

The North Coast Collection is a collaboration between Taylor Stitch and Mission Workshop.

Photo: Taylor Stitch

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The North Coast Collection is a collaboration between Taylor Stitch x Mission Workshop.

The North Coast Collection is a collaboration between Taylor Stitch x Mission Workshop.

Photo: Taylor Stitch

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The Telegraph Suit is one of San Francisco company Taylor Stitch's crowdsourced designs.

The Telegraph Suit is one of San Francisco company Taylor Stitch's crowdsourced designs.

Photo: Taylor Stich

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Roman Khan and Jennifer Chong, co-founders of Linjer, a leather-goods brand that has moved into watches.

Roman Khan and Jennifer Chong, co-founders of Linjer, a leather-goods brand that has moved into watches.

Photo: Linjer

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Roman Khan and Jennifer Chong are the founders of Linjer, a Bay Area leather-goods brands that has moved into watches.

Roman Khan and Jennifer Chong are the founders of Linjer, a Bay Area leather-goods brands that has moved into watches.

Photo: Linjer

Crowdfunding helps SF brands give customers what they want

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From the runaway success of the Pebble smartwatch — the first one raised $10.3 million on Kickstarter in 2012, and last year the Pebble Time raised over $20 million — to your cousin’s upstart T-shirt company, it’s become de rigueur in the fashion world, especially the digital fashion world, to skip the VCs and find your fiduciary footing in the crowd.

Betabrand sources not just money but product ideas from the crowd; the socially conscious line of shirts Rockridge SF raised money on Backer Club; and countless Kickstarters have launched countless brands. At this point you’re foolish if you don’t at least consider rattling the old virtual tin cup before investing your life savings in a new line of hoodies.

What’s less common, and perhaps more interesting, is something afoot now with a handful of Bay Area brands. As a means to de-risk their products, and learn more about what their customers actually want, they’re crowdfunding everything.

“I understand with traditional retail that there’s this reveal, this mystique with a new collection,” Michael Maher, co-founder of the San Francisco apparel line Taylor Stitch, told me over coffee. “I’m on the opposite side. I want to run a better business by not keeping my customers in the dark.

Photo: Taylor Stich

The Telegraph Suit is one of the crowdsourced designs by S.F. company Taylor Stitch.

The Telegraph Suit is one of the crowdsourced designs by S.F....

“Sure, we show our cards earlier than a lot of other companies,” he continued, “but it’s crazy to invest so much money and effort in something that people might not actually want. I’d much rather be invested in fabric than a bunch of finished size 40 jackets that no one wants to buy. Fabric, I can do something with.”

Roman Khan is the co-founder of the leather goods brand Linjer, and he has successfully run four crowdfunding campaigns — two on Indiegogo and two on Kickstarter — and he sees the approach as absolutely critical to not just raising capital, but maintaining creative control.

“We always had the option of raising money in a more traditional way, but that was never really a path we wanted to take, as we’ve seen too many companies be under the pressure to grow too fast, at the cost of brand integrity and product quality. Plus it’s also a way to get some market intelligence on which styles and colors are in demand, before taking on too much inventory risk.”

The casual San Francisco menswear company Gustin takes some of Linjer and Taylor Stitch’s lean methodology even further by carrying no inventory at all. Essentially, the company introduces a product, sets a funding target, takes orders until it hits the mark, then goes right into production. Returns may be tricky, but it’s a tight, tight ship.

For its part, Linjer just finished funding on a pair of lovely minimalist watches, raising (as of press time) nearly $700,000. Clean, classy and designed with Khan’s Norwegian heritage in mind, the watches are both an extension of Linjer’s line of leather bags and accessories, and totally new territory.

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“We have 57 variants” when factoring in size, case color and strap color, Khan said. “You can imagine the operational complexity, in addition to the inventory risk, that a small brand like us would have to take on if it wasn’t for crowdfunding. Right now we’re getting a very strong idea of what styles and colors are selling, and we think it will save us hundreds and thousands of dollars down the line.”

Taylor Stitch has taken a somewhat different tack, eschewing the big marquee campaign in favor of crowdfunding, well, just about everything it makes. In early 2015, the company started putting new products in the Workshop section of its website for two weeks, setting a funding goal, and offering the product to anyone who cares to contribute for around 20 percent off. Once it knows how many to make, and about how much additional inventory to carry, Taylor Stitch then takes the next six to eight weeks to make the clothes, ship them to customers, and get them in their shops.

It’s essentially a pre-sale, but with the added benefit of knowing if anyone wants to buy the garment in the first place.

By Maher’s lights, Taylor Stitch now puts around 90 percent of its new products in the Workshop. He claims that 98 percent of them get fully funded.

“I’m not going to crowdfund a T-shirt,” he said, “but anything beyond that we put in there. It’s crazy not to. You get so much good data.”

Ultimately for both Maher and Khan, the name of the game is quality and community.

“I want to create a high-end product that I can deliver at a reasonable price,” said Maher. “And by mitigating risk through crowdfunding, we’re doing it.”

Khan concurs: “We hope to offer our watches at a price that makes them as accessible as possible, because what we daydream of, as founders, is to run into random people in the streets wearing our watches!”